Auditors' board to shed light on KPMG problems

Cape Town - The Independent Regulatory Board for Auditors (IRBA) will shed light on the extent of problems at KPMG next week when it briefs MPs after the firm's involvement with the Guptas and the drafting of the SA Revenue Service “rogue unit” report.

This followed the investigation launched by the IRBA in June after it emerged that KPMG had converted the wedding expenses for the Guptas into business expenses. This related to the R30 million that was transferred for a dairy farm in Vrede, in the Free State, to fund the Guptas' wedding at Sun City in 2013.

The meeting between the IRBA and the standing committee on finance will highlight progress made by the regulatory body in the investigation against KPMG. Despite mounting pressure against KPMG, the auditor-general, Kimi Makwetu, has said he would not cut ties with the firm pending the outcome of the various investigations against it.

He said he would limit the firm’s role in the work it does for the office of the auditor-general.

Makwetu met with the executive of KPMG under its new chief executive, Nhlamu Dlomu.

He said he would await the outcome of the various investigations into KPMG. This includes the IRBA probe, the investigation by KPMG International and another probe by the South African Institute of Chartered Accountants.

Finance Minister Malusi Gigaba has said the government would review the work that has been done by KPMG. The DA has followed suit and said it would review the work of the firm in the 30 municipalities it governs.

Parliament also announced that it has cut ties with KPMG to audit the books of its medical aid scheme. The scheme involves 400 MPs in the National Assembly, 90 members in the National Council of Provinces and MPLs from the various provincial legislatures.

Parliament also said it would review the other work done by KPMG for the institution.

Makwetu said: “While we are awaiting the outcome of the investigations, the auditor-general will continue to secure the services of KPMG SA, limited to the audits allocated to them.

“This arrangement will be in place as an annual allocation rather than a two-yearly allocation of audit work as is current practice with all firms we contract with.

"This will be reviewed subject to the outcome of the pending investigations,” said the auditor-general.

They would continue to engage with the firm and deal with areas where problems had been identified.